3â Controls over misleading advertising

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Business protection from misleading marketing

Deception requires that things are not as they seem, so an advertisement will

be deceptive if it is misleading in some way. It may contain a statement that is

untrue because of something it says, or perhaps, does not say. Statements can

be rendered misleading through both commission and omission.15 Concealing

an important fact is potentially as deceptive as a straight-forward misstate-

ment.16 Further, the context of the statement can also be relevant, as a state-

ment that is 100 per cent accurate may be rendered misleading by the manner

and/or context in which it is made.17 Incorrect or misleading statements may

involve the nature and characteristics of the goods or services being advertised,

e.g., an item not being as described. However, statements may also refer to the

intended behaviour of the trader, e.g., as to when he will dispatch the goods. If a

statement is untrue because the trader promises to do something that he has no

intention of doing, e.g., meeting delivery dates, that is sufficient to render the

advertisement misleading.18

Having established that the advertisement deceives or is likely to deceive,

one of two things must be proven. It must be shown either that the decep-

tion is likely to affect the economic behaviour of the trader to whom it was

addressed or, alternatively, that the deception injures or is likely to injure a

competitor. In respect of the former, it is only the economic behaviour of the

trader that is relevant and other factors such as his health and safety are irrele-

vant in this context.19 The economic behaviour of a trader will be affected if,

for example, he decides to purchase the goods or services advertised, on the

basis of the information in the misleading advertisement.20 The most obvious

injury to theÂadvertiser’s competitor occurs when the recipient of the adver-

tisement buys the relevant goods or services from the advertiser in reliance

on the advertisement and in the mistaken belief that he is buying the goods

from the advertiser’s competitor, i.e., where he purchases goods advertised

by A in the erroneous belief that he is purchasing them from B. The injury in

15

Compare CPUT Regulations 2008, reg. 5 (misleading actions) and reg. 6 (misleading omissions).

See Part 5 Chapter 2.

16

See R v. Haesler [1973] RTR 486 and R v. Southwood [1987] 3 All ER 556, both of which were

decided under the Trade Descriptions Act 1968. In R v. Haesler, the defendant removed the

words ‘ex Channel Islands’ from the registration document of a vehicle to suggest that the vehicle

was newer than it was, while in R v. Southwood, the odometer on a car was adjusted to conceal

the true mileage of the vehicle.

17

Compare Trade Descriptions Act 1968, s.3(2), which stipulated that a statement which, though

not false, was misleading was to be deemed to be a false trade description and, as such, capable of

giving rise to criminal liability if false to a material degree.

18

See OFT, Busines to Business Promotions and Comparative Advertisements: A Quick Guide to the

Business Protection from Misleading Marketing Regulations 2008, OFT 1058 (London, 2009).

19

This is narrower than the previous controls under the Trade Descriptions Act 1968, where it was

only the falsity of the statement that was relevant and not its impact on the person to whom the

statement was directed. However, this concentration on the economic interests of the person

who has been misled accords with the approach in the CPUT Regulations 2008, reg. 3(3),

which stipulates that a commercial practice is unfair if it affects the economic behaviour of the

consumer.

20

OFT Guide, above n. 18, at 5.

397

3â Controls over misleading advertising

this scenario is obvious: trader B has been denied the sale and the consequent

opportunity to make a profit.

Q1 Analyse the scope and impact of the controls over misleading adver­

tisements.

(c)â Definition of ‘misleading’

Having recognised that it is the impact and content of the advertisement that

dictates whether it is misleading for the purposes of the BPMM Regulations

2008, it is clearly important to understand the meaning and parameters of the

term ‘misleading’. Regulation 3(3) to (5) provide a non-exhaustive definition

and list of factors that are relevant to interpreting the term ‘misleading’ as used

here. Regulation 3(3) requires that account be taken of all the features of the

advertisement, with particular regard to any information about the charac-

teristics of the product, the price or manner in which the price is calculated,

the conditions on which the product is supplied or provided and the nature,

attributes and rights of the advertiser.21 The use of the phrase ‘all its features’ is,

of course, a catch-all term and hence interpretation is not restricted to the four

factors specifically mentioned.

Regulation 3(4) addresses the meaning of the phrase ‘characteristics of the

product’ as used in regulation 3(3)(a) and includes many of the factors that

were included previously in the Trade Descriptions Act 1968, section 2. This

list is also non-exhaustive and hence other factors can be considered if relevant.

The factors specifically quoted include, first, the availability of the product,

which requires that the product is available on the market and that the trader

has a supply of it or can access a supply without delay.22 Other factors detailed in

paragraph (4) include the nature, execution and composition of the product,23

which covers such things as the general description of the product itself, how

the product or service is to be provided, and the materials or fabrics from which

it is made, e.g., copper, wool, stainless steel.

The next two factors encompass the date and method of the manufacture of

the product and of its provision. This includes statements relating to the age

of the product24 and the method by which it was made, e.g., hand-made and

organic. The method and date of provision of the product will include state-

ments relating to the intended delivery date and whether the product must be

collected by the purchaser or will be delivered to him and, if so, at what cost.

21

These factors bear a marked resemblance to some of those adopted in the CPUT Regulations

2008, reg. 5(4) in respect of misleading statements made to consumers.

22

It is possible that misleading advertisements relating to limited editions and limited stock

availability would fall within this paragraph. See D.L. Parry, R. Rowell and C. Ervine (eds.)

Butterworths Trading and Consumer Law (London, 1990) Division 5, para. 228

23

BPMM Regulations 2008, reg. 3(4)(b)–(d).

24

Which may be significant in assessing the value of the item, be it a second-hand van or a valuable

antique.

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Business protection from misleading marketing

The next two factors address the fitness for purpose of the item and the uses for

which it is intended. Clearly, there are echoes here of the civil law requirement

of fitness for purpose in the Sale of Goods Act 1979, section 14(3). Fitness for

purpose includes any reference to particular facets of the product which impact

on its use, e.g., being water-proof or shock-proof, while uses of the product can

reflect not only the intended uses of the product in the future but, it is argued,

also any references to its previous usage, e.g., the number of previous owners of

a vehicle or its recorded mileage.25

The next three factors cover the quantity of goods, their specification, such as

capacities and dimensions, and their geographic origin, such as ‘made in Wales’.

The last two factors relate to the results to be expected from usage of the prod-

uct and, finally, the details of any tests or checks that have been carried out on

the product.

Having considered the parameters of the phrase ‘the characteristics of the

product’, it must be remembered that this is only the first of the four aspects

of a product that is specifically listed in regulation 3(3), the other three being

the price or manner in which the price is calculated, the conditions on which

the product is supplied or provided, and the nature, attributes and rights of the

advertiser.

The price or manner by which it will be calculated is a self-explanatory factor,

indicating either that an actual price has been quoted or that a mechanism for

calculating it has been provided, e.g., that the goods will be sold by reference to

a unit price such as per lb, kg, tonne, etc, or alternatively by reference to a price

prevailing on a particular date. It would also include details of special offers and

details about delivery charges.26 The conditions on which the product is sup-

plied or provided relates to the contractual terms on which the goods are being

supplied and would include details of delivery times, exclusion and limitation

clauses, liquidated damages clauses, the duration of the contract, termination

clauses, etc.

The last of the four aspects is the nature, attributes and rights of the adver-

tiser, which include his identity, assets, qualifications, his ownership of indus-

trial, commercial or intellectual property rights, and any awards or distinctions

that he may possess. Thus, it would include claims that he works for a particular

company, or that he has specified qualifications27 or that he has received named

industry awards.

Q2 Analyse whether the four aspects of the product referred to in regulation

3(3) provide a comprehensive approach to this topic.

25

See Butterworths Trading and Consumer Law, above n. 22, Division 5, para. 28.

26

Ibid.

27

See R v. Breeze [1973] 2 All ER 1141, CA, in which the defendant falsely claimed that he was a

qualified architect contrary to the Trade Descriptions Act, 1968.